Jakarta,- Coal prices have fallen further, touching the lowest position since June 15, 2021 or 2.5 years. Prices collapsed due to a lot of negative sentiment towards future coal projections.

Referring to Refinitiv, the ICE Newcastle coal price for the February contract closed at US$ 121.65 per ton or 1.3% lower on Wednesday (24/1/2024). The price was the lowest since June 15, 2021 (US$119 per ton).

Coal prices continue to collapse due to the many negative sentiments regarding the position of the black sand going forward. One of them is from the Energy Information Administration or EIA.

The IEA estimates that new renewable energy (NRE) will contribute more to the world's energy mix in the coming years. Quoting RFI, IEA data shows that EBT accounts for 37% of total electricity generation in 2026, mainly thanks to the decline in solar energy costs.

If nuclear power is included, nearly half of the world's electricity is expected to come from low-emission sources by 2026. Meanwhile, the IEA forecasts an average decline of 1.7% per year in electricity generation from coal through 2026.

The increasing use of renewable energy will lead to less use of coal. This means that coal demand will experience a downward trend going forward, which will also cause prices to correct.

Turning to Australia as an important world exporter, tropical storm Kirrily threatens coal ports in Queensland, Australia, which could affect coal exports. A number of ports, including Abbot Point, Dalrymple Bay, and Hay Point, are in the path of the storm, which could delay transactions that will affect price movements.

Turning to the world's 2nd largest consumer, India is taking big strides in coal gasification projects to reduce imports of natural gas and LPG. With abundant coal reserves, the government plans to start these projects in six months, with production starting in 2028-29.

Although India's demand will surge due to this sentiment, India's high production makes for a large supply, limiting its import levels. India's limited imports cause coal prices to correct.